Monday, February 10, 2003

Unemployment 101-Anne Wilson has a good rant on unemployment that's a bit ignorant (not stupid, mind you, ignorance is curable) on economic statistics.
Bob Herbert wants to know why, if the unemployment picture as put forth by the US Department of Labor is so rosy, why thousands of Chicago-land residents swamped a local junior college rumored to have applications for Ford Motor Company assembly plant jobs. Me too.
Well, if we have 5.7% unemployment, that means that 57 out of every 1000 people in the workforce (either employed and/or looking for a job) doesn't have a job at present. If there are 2 million people in the Chicagoland workforce (quick guestament), that would mean that a bit over 100,000 are looking for a job Even in a healthy economy, you're going to have a certain amount of unemployment. A good hunk of those thousands looking for factory jobs might be between jobs naturally, others might have been laid off due to a cyclical downturn in the economy and still others might be employed elsewhere and are looking at the Ford jobs as an upgrade.
I am a diehard Republican. But more and more I find myself channelling my inner Dorothy Day as I contemplate my middle-class friends and their families devastated not only by unemployment, but by one layoff after another, with each subsequent job paying less and demanding more work than the last.
Economic lore has the idea of structural unemployment, where people either don't have the skills needed in a changing economy of will need to more to where the jobs are. What Ms. Wilson's writing about might be better described as structural underemployment, like the one-time factory rat working at McDonalds or the local grocery store. Changes in the economy will leave many 40-somethings without saleable skills, too old to retire and too young to easily start a new career.
We went through our own unemployment horror this summer and fall, as the engineering startup for which my computer engineering husband worked first closed its St. Louis laboratory, and then finally declared bankruptcy. Our own situation was cushioned by (grab your seats) the Plant Closing Act (sponsored by one Ted Kennedy of Massachusetts) and so we had two months of income while my husband looked. Unfortunately, a good portion of that income vanished to pay $1000 a month premiums for COBRA medical insurance. It took months before he became comparably employed again, and only recently have the last few engineers from his old company found jobs - and not necessarily permanent ones, either.
The engineers might have found jobs in growing areas, but aren't ready to pick up and move families, especially if they have roots of long standing in that community. Part of structural unemployment is the reluctance of people to move to more fruitful ground; much of this is natural and honorable, our culture is already very mobile and asking people to become even more nomadic wouldn't be proper. To the extent that we prize community and emotional ties to friends and family, we're stuck with some extra structural unemployment. Another problem with higher-end workers is that it takes time to get a good job; an old rule of thumb is that it takes a month per $10,000 of yearly salary to find a job. Such specialized workers will command a high salary, but finding the right spot will take time, especially if a lot of their peers have been laid off in that area. White collar workers will have longer stretches of frictional (naturally between jobs) unemployment due to their higher salaries; you can get a burger-flipper job faster than an accounting job.
Other friends with engineer husbands have even worse stories. For my friends whose husbands *aren't* in technology, this has been the picture for them for the past five years now. These are college-educated people with skills supposedly in demand, like the skilled trades. The women have been committed to staying at home, raising their children responsibly, some of them home schooling, but now they're working, or looking for work too. So yes, I too would like to see an overhaul of the labor statistics. We also need to add those *entering the labor force for the first time.* It should include teenagers as well, so that 16-18 year olds not in school and not working should be counted as unemployed.
They're already in the stats. If you're actively looking for work, you're in the labor force. As long as the teenagers are looking for work, they're counted.
Similarly, extend this to those *returning* to the labor force after a certain period has elapsed (let's say five years.) This would include people like returning housewives; people who retired once but need to work again, etc. These people seeking work should be counted as unemployed until they find a job.
Already there. As long as you're looking, you're in the labor force and counted as unemployed. The housewives, students and retirees that aren't looking for work are the ones that aren't counted in the labor force.
We should also count the "unemployed but not seeking employment." That would include people like me (at the moment.) It needs to be called out separately so that statistics can be analyzed without this population. The numbers are important because they let the government know how many *potential* workers are out there.
The unemployment stats do include a "not in work force" line.
We should also figure out a way to track *underemployment.* This would be more difficult (because salary compensation alone isn't enough, as salaries vary widely by geography.) It would involve studies and surveys. But it's still very important, because underemployment inevitably leads to decline in the living standard.
Good idea; defining underemployed would be tricky as heck. Am I underemployed given that I could be teaching at a more prestigious school or working at a think tank? Eileen's underemployed right now by that count, but that won't last for too long. My mom is underemployed, working as a florist while having a Bachelors degree in history, but she opted to take the florist job a quarter-century ago rather than go back into teaching after being a stay-at-home mom for 17 years.
On the other hand, that might cause a bit of a political problem for the current administration, which (I say this as a diehard Republican) seems to care more about the well-being of companies outsourcing to Bangalore & Beijing than that of American citizens.
Pointing out the people who are underemployed is one thing; figuring out how to get them properly employed is a bigger problem, and a government program to guide people into proper employment might be more trouble than its worth. I'd be open to suggestions, but it sound more Swedish than American.

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